SMU Data and Models
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SMU's January at a glance
Written by David Schollaert
February 10, 2024
Steel prices stabilized in early January before they began to inflect lower midway through last month. Tags peaked at $1,045 per short ton (st) during the first week of January, even as some mills tried to push prices higher, to no avail. Hot-rolled coil (HRC) prices ended January at an average of $1,000/st, declining by $45/st during the month.
The SMU Price Momentum Indicator for sheet products moved from Higher to Neutral to kick off January, before moving to Lower over the second half of the month.
The Price Momentum Indicator on plate had been pointing Higher through December despite signs of weakness due to waning demand. It mimicked sheet, first shifting to Neutral and then Lower as spot buying continued to slow and mills were reportedly cutting prices.
Raw material prices have fluctuated somewhat but were again mostly sideways last month, except for scrap. Scrap prices declined on average in January, after moving higher the month prior. Scrap tags slipped between $5-10 per ton on average. Despite some movement midway through the month, zinc and aluminum spot prices were largely stable, remaining within historical levels. You can view and chart multiple products in greater detail using our interactive pricing tool here.
The SMU Steel Buyers’ Sentiment Index remained positive, falling quickly before recovering a bit to close out the month. Current Buyers’ Sentiment declined from +68 in December to +66 on average in January. Future Sentiment hovered at an average of roughly +62, down slightly from the prior month’s reading of +65.
Our Steel Buyers’ Sentiment 3MMA Index (measured as a three-month moving average) had been eroding over the past four months, falling to +58 in October, but recovered to +65 in December and moved up to +66 on average last month.
Hot rolled lead times averaged 5.85 weeks in January, though they fell as low as 5.16 weeks at the end of January. That’s down from 6.83 weeks in December. SMU expects lead times to potentially dip further as buying seems to have cooled. A history of HRC lead times can be found in our interactive pricing tool as well.
About 81% of HRC buyers reported at the end of January that mills were willing to negotiate on prices, up significantly from roughly 41% in December when mills were still trying to move prices higher. The pullback in buying shifted negotiation options higher as mills sought to move product.
Key indicators of steel demand are still showing some signs of weakness overall and are nowhere near the bullish levels some had shown nearly a year ago. While there are some backlogs in the energy and construction sectors, demand for the early portion of 2024 remains rather controlled, especially as buyers appear to be holding off on excessive buys and have turned their attention to controlling inventory and pushing back on prior mill price hikes.
See the chart below for other key metrics for January:
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_AtAGlance_2024_01-942x1024.png)
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_DS_headshot.png-150x150.jpg)
David Schollaert
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